Metros

Demand is strong across the metro, as Millennials continue to move into well-located, modern apartments, pushing rent growth to its highest rate in two years.

Despite a deceleration in rent growth following record deliveries over the past three years, investment sales for 2018 totaled more than $4.5 billion through November.

The 20,000 units delivered since the start of 2017 are quickly being absorbed, with occupancy in stabilized assets climbing to 94.4 percent in October.

Steady employment growth fueled by a large and diversified economy underpins a robust multifamily demand in the metro. Despite a surge in construction, the average occupancy rate was 96.6 percent as of October.

An accelerating pipeline that brought nearly 75,000 units online since the beginning of 2015 slowly dampened rent growth to 2.1 percent year-over-year as of November 2018.

Demand for apartments is solid, sustained by steady employment and population gains. Bolstered by its highly educated workforce, the metro accounted for 24 percent of Southern California’s GDP in 2017.

Although long-term demographic and economic trends are still pushing up demand in the metro, accelerating deliveries have managed to dampen rent growth.

Despite a significant rise in deliveries, rents for Lifestyle units grew 3.4 percent and the occupancy rate stayed at 98.1 percent, among the highest in the U.S.

Bolstered primarily by the tech sector, San Jose’s employment growth has been solid, hovering around the 3.0 percent mark all year long and hitting 3.3 percent last September.

Despite strong demand, apartment construction across the borough has slowed, while the average rent is approaching the $4,200 mark.

The trend is sustained by an ongoing influx of new residents from pricier Bay Area markets and a limited multifamily supply.

The metro’s multifamily deliveries reached a cycle peak in 2018, boosted by population and employment gains, while investors mostly targeted Fort Lauderdale assets.